SOURCE: Pontiflex


September 19, 2012 09:00 ET

Borrell Survey Finds 72% of Small and Medium Businesses Will Increase or Keep Same Mobile Ad Spend in Next Twelve Months

More SMBs (26% of Survey Respondents) Prefer to Pay for Email and Social Signups, as Compared to Banners (6%) and Clicks (19%)

BROOKLYN, NY--(Marketwire - Sep 19, 2012) - According to a new survey conducted by Borrell Associates, 72% of small and medium businesses (SMBs) will increase or keep the same mobile ad spend in the next twelve months. Of those increasing spend, 65% of SMBs expect to increase spend by up to 30% in the next twelve months.

With more than 1300 total respondents, the survey reveals that the upside for mobile advertising in the SMB market is immense. Nearly half (49%) of SMBs that have done mobile advertising in the past say a higher ROI would prompt them to increase ad spend even further. 

This Borrell survey provides important insights into the factors that would increase the adoption of mobile advertising by local businesses. The survey reveals that more SMBs (26%) would prefer to pay for signups (the email addresses and social networking handles of consumers interested in their businesses) as compared to clicks (19%) or impressions (6%). Given that a large percentage of mobile advertising is sold on a cost per click (CPC) or cost per thousand impressions (CPM) pricing model, the survey highlights a disconnect between SMB marketing preferences and advertiser offerings in the marketplace. In addition, 75% of SMBs said that the ability to target ads by location was very important or somewhat important in a mobile advertising campaign.

The survey was conducted at a time when the consumer adoption of mobile devices has exploded in the marketplace. According to Nielsen, more than 50% of people in the US have smartphones. However, according to a report released by the IAB, mobile advertising accounts for less than 5% of the total digital advertising spend. The Borrell Survey highlights improvements that can be made to many of the existing ad solutions to increase the uptake of mobile advertising.

"Mobile advertising is growing, but hasn't kept pace with the rapid adoption of mobile devices," said Zephrin Lasker, CEO and co-founder, Pontiflex. "This survey shows that SMBs need real returns from mobile advertising, and CPC and CPM pricing models are just not working for them. SMBs want to use mobile ads to grow their businesses. To help them do so, the industry must innovate and try new things, and that's what we are doing with AdLeads."

Additional findings of the survey include:

  • 77% of SMBs say that the ability to analyze campaign performance is somewhat important or very important.
  • 75% of SMBs say that the ability to optimize campaigns in real time is very important or somewhat important.
  • Of the SMBs who plan to increase ad spend, 32% of SMBs plan to increase their mobile ad spend by 11-20% over the next twelve months.
  • 46% of SMBs would be very interested or somewhat interested in a self-service solution for mobile ads.

The survey was conducted by Borrell Associates on behalf of Pontiflex, the company behind AdLeads, the industry's first mobile signup ad platform. With AdLeads, SMBs can run geo-targeted ads on top of mobile apps. They only pay when someone signs up to hear from their business -- and never for wasted clicks or impressions. Since its launch in March 2011, more than 5,000 businesses have signed up for AdLeads.

Jenson USA is an online retailer that sells complete bikes, bicycle parts and accessories. The company was founded by Mike Cachat, a bicycle enthusiast who has been building bicycles since he was 13. Jenson USA used AdLeads to acquire new email subscribers for its newsletter.

"At Jenson USA, we are passionate about connecting with bicycle lovers," said Jason Scott, email marketing manager, Jenson USA. "With AdLeads, we are able to reach these people on mobile devices and do it in a profitable way. We only pay for leads and not wasted clicks."

Detailed survey findings can be found here:

Survey Methodology

The Mobile Adoption Survey began on August 3, 2012 and closed on September 10, 2012. Survey questions were designed in partnership between Borrell Associates and Pontiflex, Inc. All interviews were conducted online. Respondents were recruited to participate via emails sent to local business partners of local media (mostly daily newspapers) from their lists of past and present clients, as well as prospects. A total of 21 newspapers participated in sending emails, resulting in 1,353 initial responses with 868 fully completed interviews as of September 6, 2012. 

Respondents were with businesses in 24 states, with a special sub-sample of 153 from a radio client in the Brisbane, Queensland, Australia market.

Respondents averaged $2.3 million U.S. income with 41% reporting under $1 million. Respondents also reported an average of $68,393.15 total expenditures on advertising and marketing, with 50% spending under $25,000 total. Respondents report a median of six employees, with an overall mean of 78 full-time employees.

Interviews were a maximum of 42 questions, including firmographics, typically requiring approximately 15 minutes to complete. Respondents were provided a general incentive of participation in a drawing for an iPad and in some markets an additional prize. The iPad drawing will be held on or about October 15, 2012. Final data might vary as more responses come in.

About AdLeads

AdLeads is the industry's first self-serve mobile signup ad platform. With AdLeads, businesses of all sizes can run ads on top iPhone, iPad and Android apps. They only pay when someone signs up to hear from them -- and never for wasted clicks or impressions. Since its launch in March 2012, hundreds of businesses like children's publisher Paper Hat Press, Brooklyn-based restaurant Nita Nita and Australian daily deal website Catalogue Central have used AdLeads to get new customers and grow their businesses.

About Borrell Associates

Borrell Associates is an advertising research and consulting firm that assists local media websites in maximizing their ad revenue. Borrell Associates helps media companies to develop and implement fact-based strategies and ad-sales tactics supported by our proprietary local ad-spending data through products such as the Compass Report that details local ad-spending patterns for 100 businesses across 13 media. In 2011, Borrell Associates acquired Belden Interactive, a leading survey research firm studying ad-spending intentions at the local-level by SMBs. With 18 employees, Borrell Associates is based in Williamsburg, VA with an additional office in Seattle.

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